Article: E-2 Visa Issues for Chinese Clients By H. Ronald Klasko

E-2 Visa Issues for Chinese Clients

My colleague, Oliver Yang, has been in China the last few weeks; and I am
preparing for my next trip to China in May. The main focus of our meetings
in China is to confer with agents and their clients interested in applying
for E-2 visas based on acquisition of citizenship in Grenada.

Based upon our experience with our Chinese clients, the following are some
of the questions that we are most frequently asked, together with our
responses:

1. How much money do I have to invest to get an E-2 visa?

Although we have had success with E-2 visa applications based upon
investments in the range of $100,000, we generally prefer to see
investments in the $200,000 + range if possible. There are two reasons for
this. One reason is that often the chances for the business being
profitable increase as the investment amount increases. Also, although no
exact amount of employees is required, a larger investment often is
accompanied by an increase in the number of employees, which is helpful for
the E-2 visa application process. Ultimately, the key issue is presenting a
credible case that the amount of the investment is sufficient for the type
of business in which the investment made to be successful.

2. Does the entire amount of the investment have to be made at the time of
filing the visa application?

There are different answers to this question depending upon whether the
application is based upon an investment in an existing business or in a new
business. If the investment is being used to acquire part or all of an
existing business, it is usually sufficient if the investment is deposited
in an irrevocable escrow with the investment amount released from escrow
upon approval of the E-2 visa application. If the investment is made in a
new business, it is best if at least some of the investment has already
been used to start up operations of the business. The remainder of the
investment may be in irrevocable escrow. It is acceptable if the investment
amount is refundable in the event that the E-2 visa application is not
approved (some franchise agreements now include this provision). There is a
difference among U.S. consulates around the world regarding the necessity
that a new business actually has started operations, so it is often safer
if the business is actually operating.

3. Does the Chinese identity of the E-2 visa applicant affect
approvability?

In our experience, the answer to this is no. We have great experience with
many E-2 visa applicants around the world who are dual citizens applying
based on a second country citizenship. In the case of China, we have not
seen any examples of applications for E-2 visas by citizens of Grenada (who
also have Chinese passports) being denied for that reason. The U.S.
recognizes dual citizenship and allows E-2 visa applications by citizens of
a treaty country who are also citizens and residents of a non-treaty
country.

4. Is it possible to convert an E-2 visa to a green card?

This is very possible, in most cases through the direct EB-5 process. The
amount of the E-2 investment can be used as part of the direct EB-5
investment. In most cases, the direct EB-5 investment amount must be at
least $500,000. If, for example, an E-2 visa applicant had already invested
$250,000 for the E-2 visa, the direct EB-5 application could be based upon
another $250,000 investment. Even though it is expected that the EB-5
investment amount is likely to increase in the coming months or years, the
investor will likely be grandfathered at the $500,000 investment amount as
long as the EB-5 petition is filed before the increase in investment amount
becomes law. There are many issues involved in converting from E-2 to EB-5;
we have extensive experience in dealing with these issues. It is best if we
deal with these issues at the time of the E-2 visa application in order to
prepare in advance.

5. Is it possible for two Chinese citizens to apply for E-2 visas in the
same business?

Yes, it is possible, but it is more difficult. In most cases, when we are
doing this, we have one of the applicants (who is a Grenada citizen) apply
as the investor and the other Grenada citizen applicant apply as the
manager of the treaty investor company. It is best if the investor
applicant invests most or all of the total investment.

6. What are the options for the child of an E-2 investor when the child is
turning 21?

One option is for the child to change status to F-1, which can be done in
the U.S. The other option is for the child to make his or her own
investment and apply for his or her own E-2 visa.

7. Is it possible to obtain an E-2 visa if an EB-5 petition has already
been filed or if some other permanent residence application has been filed?

It is possible, but there could be issues. A key issue is whether the EB-5
petition (or other immigrant petition) indicated that the applicant would
be obtaining his or her immigrant visa at a U.S. consulate outside of the
U.S. Whenever we file an EB-5 petition, we indicate this on the I-526 form.
The reason that this is important is that the U.S. consular officer has to
be satisfied that the applicant intends to leave the U.S. and apply for an
immigrant visa (green card), if at all, outside of the U.S. We are very
careful in preparing our clients for the consular interview on this issue,
because the response to the consul on this issue is very important. Our
success rate in these types of applications has been very high.

8. Is it necessary to apply for the E-2 visa at the U.S. Consulate in
Barbados?

Most applications by Chinese applicants have been filed at the U.S.
Consulate in Barbados, and the success rate has been high. However, it is
not necessary to apply there. The application can be filed at the U.S.
Consulate in Guangzhou (and has been done successfully), at the U.S.
Consulate in any country where the applicant has a residence (such as Hong
Kong or Singapore, for example) or at a third country consulate. We have
been working with a variety of U.S. Consulates around the world which
accept third country E-2 visa applications. Part of our service to our E-2
visa clients is choosing the best consulate for the purposes of the
individual client and then preparing the client for the issues that may
arise at that consulate.

9. What problems have arisen for Chinese citizens applying for E-2 visas
based on newly acquired Grenada citizenship?

Although, to our knowledge, a high percentage of these applications have
been successful, the biggest issue that we have seen relates to Chinese
citizens who acquire Grenada citizenship based on the donation option
(rather than the acquisition of property option) and who do not establish
any nexus (connection) with Grenada. Although this is not a legal
requirement, it has been a requirement imposed by some U.S. Consulates,
including the U.S. Consulate in Barbados. For our clients choosing the
donation option, we suggest that the client at least have visited Grenada
and have an address in Grenada (for example, based upon a lease of property
for one year). It is possible, and best, for the client to obtain a Grenada
residence card at the same time as acquiring citizenship.

10. Is it necessary for the Chinese/Grenadian E-2 visa applicant to
actively manage the E-2 business?

It is possible, but not necessary, for the E-2 visa holder to actively
manage the business. If he or she will not actively manage the business, we
will want to make certain that the E-2 visa application package makes clear
that the E-2 visa applicant will be in a position to “direct” the manager
and participate in the successful development of the business. This is a
key focus in our vetting process for E-2 investment vehicles that we
present as options to our E-2 visa applicants when requested.

11. Is it possible for the E-2 visa business to have been established prior
to acquisition of Grenada citizenship?

This is possible, although we need to review the documents carefully. There
is no problem if the business has been in existence for some period of
time. However, issues may arise if we are relying upon investments made
before acquisition of Grenada citizenship. These issues can usually be
handled successfully with advance planning.

12. Have Chinese applicants who obtain Grenada citizenship been successful
in applying for E-2 visas?

Yes, many applicants have been successful. The issues for Chinese/Grenadian
E-2 visa applicants are the same as the issues that we have been working
with for clients applying for E-2 visas from over 80 countries around the
world. These are not new issues, and we have significant experience in
dealing with these issues worldwide. The only issues that we have seen that
specifically involve Chinese nationals applying for E-2 visas after recent
acquisition of Grenada citizenship involve the issue of lack of “nexus”
with Grenada discussed in response to a previous question above.

Anyone interested in consulting regarding the E-2 visa application, or in
meeting Oliver Yang or Ron Klasko in China, may contact us by email (Ron
Klasko at
rklasko@klaskolaw.com
or Oliver Yang at
fyang@klaskolaw.com
) or WeChat (Ron Klasko ID: BAKKLK or Oliver Yang ID: foliveryang).

CORRECTION 5/3/2018: A previous version of this post, in question
number 9, had mistakenly suggested clients visit or have an address in
Barbados, when it should have been Grenada. The answer to question 9
now reflects the correct country.

CORRECTION 5/8/2018: A previous version of this post, in question
number 5, had mistakenly stated that the E-2 manager does not need to
be a Grenada citizen. The answer to question 5 now reflects the correct
information.

The material contained in this article does not constitute direct legal
advice and is for informational purposes only. An attorney-client
relationship is not presumed or intended by receipt or review of this
presentation. The information provided should never replace informed
counsel when specific immigration-related guidance is needed.

About The Author

H. Ronald Klasko (Ron) is widely recognized by businesses, universities, hospitals, scholars, investors and other lawyers as one of the country’s leading immigration lawyers. A founding member of Klasko Immigration Law Partners, LLP and its Managing Partner, he has practiced immigration law exclusively over three decades. Under his leadership, the firm has been chosen every year for the last ten years by the highly regarded Chambers Global 2015 as one of the top five immigration law firms in the United States; Ron himself is recognized annually as being in Tier One of immigration lawyers by Chambers Global and U.S. News and World Report. In addition, he has been included in the highly regarded Best Lawyers In America for two decades and has also been repeatedly selected for inclusion in Lawdragon’s/Human Resource Executive’s list of The Most Powerful Employment Attorneys Guide. Who’s Who Legal in Corporate Immigration named him as the most highly regarded immigration lawyer in the world.

The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.